For those who have been waiting a long time for this FAQ entry, sorry about that! It's finally here!

So, as discussed in the last entry, you can't "update" a DMG created by SuperDuper! with additional files, because it's read-only. However, with a few additional steps, you canmanually create an image that can be updated by SuperDuper! just like any other volume.

Here's how! (Note: I'm assuming that you're using Panther in the following instructions... the steps might be slightly different under Jaguar.)

This first set of steps need only be done one time, when you initially create the image:

1. Open Disk Utility (found in /Applications/Utilities).
2. Without selecting any volume/drive on the left side, click the New Image toolbar button.
3. Give the image an appropriate name (like Weekly Backup), and store it on a drive other than the one you're trying to back up.
4. In the Size pop-up, choose Custom.
5. In the sheet that appears, enter the size of the drive you're trying to back up. Note that the pop-up does not have a selection for GB: you need to enter "40000" MB for 40GB. Click OK when you've got the right size entered.
6. Decide whether or not you want the image encrypted, and choose the proper value in the Encryption pop-up.
7. In the Format pop-up, choose sparse disk image.
8. Click Create.

Disk Utility will create a sparse disk image that can hold up to the amount you specified in step 5. The image itself will only be as large as is necessary at any given time, however. When the image is created, Disk Utility will automatically mount it.

Once mounted, the image is available just like any other drive. You can select it in the 2nd pop-up in SuperDuper! (the destination), and once you've completed making the backup, simply Eject the image in the Finder.

When you want to update it, simply double-click the image in the Finder, and it'll be mounted automatically. Choose it as the destination, ensure that Smart Update... is selected as the During copy method in the Options... page, and Start Copying: again, SuperDuper will treat the image like any other drive, and automatically update the image with the changes. When you're done, simply eject again.